The latest RED C Consumer Mood tracking, at a topline level appears to tell the story of continued improving consumer confidence, in line with other consumer confidence indexes.

This is highlighted by the belief among over two thirds of consumers (69%) that an economic recovery in Ireland is underway. It is further emphasised by the fact that the proportion of consumers that believe the economy in Ireland will further improve in the next six month also increases again this month.

The disconnect however is the fact that, despite what appears to be improving consumer confidence and belief that the recovery is well underway, we are not yet seeing a significant recovery in terms of actual increased consumer spending.

Further evaluation of the forces behind consumer sentiment in this poll helps to explain this disconnect. Despite the majority believing that a recovery is happening, their current financial situation and the impact the recovery is having on them personally is very different. In fact it is clear that at present Ireland has a two tier economy, both in terms of consumers being able to cope with their current financial situation and also in terms of possible future spending.

The disconnect between a belief that a recovery is in action, and what impact that has on consumer spending, is further exacerbated when we ask consumers if the recovery is benefiting them personally. Only 38% of all consumers feel that the recovery is benefiting them personally, which is just half of those that believe the recovery is underway.

With no sign of debt relief and more taxes on the horizon, and with businesses still far too cautious to be looking at pay increases, why would we expect the squeezed middle of society to be able to spend more, whatever economic recovery we are in?

Until a larger number of consumers can be further released from the pressure they are under from debt burdens and taxation, and helped to make ends meet, a consumer led spending economic recovery appears to be some way off at the moment.

Download the full report of the latest RED C Consumer Mood Tracking below
A Divided Ireland – Consumer Mood Tracking – June 2014 – General Release